Jacques & Anor (t/a C&E Jacques Partnership) v Ensign Contractors Ltd

An adjudicator must consider substantive defences properly advanced by a responding party. However, the adjudicator may decide within jurisdiction that particular evidence is inadmissible, irrelevant or of little weight. Even an erroneous decision to disregard such evidence will rarely constitute a breach of natural justice.

The court distinguishes between failing to address a substantive defence and failing to mention every item of evidence supporting it. Brief reasons are sufficient where the adjudicator has addressed the material issues. Enforcement will ordinarily follow unless the failure is material and the decision is obviously unfair. A stay may be granted where the successful party probably cannot repay the judgment sum, but the court must keep the temporary and cash-flow purposes of adjudication firmly in mind.

The claimants sought summary enforcement of an adjudicator’s decision requiring the defendant contractor to pay £96,868.18 plus VAT and the adjudicator’s fees. The adjudication concerned the value of the final account for renovation works, alleged defects, omissions, variations, delay and disruption.

The contractor argued that the adjudicator had breached natural justice by refusing to read or consider an earlier adjudication decision. That earlier decision had been agreed by the parties and declared null and void by consent order. The contractor also sought a stay of execution based on the claimants’ alleged inability to repay the judgment sum.

The central issues were whether the adjudicator had failed to consider a substantive defence and whether the evidence justified a stay.

1. Enforcement. Judgment was entered for the claimants on the adjudicator’s decision. A stay of execution was imposed on £60,000 of the judgment sum.
2. The adjudicator acted within jurisdiction in deciding that the earlier decision, having been declared null and void, was irrelevant and inadmissible. The earlier decision was not itself a defence to the later adjudication.
3. The adjudicator had to consider the contractor’s substantive defences. That obligation did not require him to analyse every aspect of the evidence supporting those defences. He considered each disputed final-account item, received evidence and submissions, and gave reasons, albeit briefly.
4. The adjudicator’s decision to disregard the earlier decision did not breach natural justice. The contractor’s substantive points had independently been advanced by reference to evidence and argument in the later adjudication. The adjudicator’s treatment of every material item made it impossible to infer that he had failed to consider the defences.
5. The adjudicator’s preliminary decision to disregard the earlier decision before receiving further submissions was undesirable but not materially unfair. The contractor had subsequently been able to provide any further evidence or argument it wished.
6. On a stay, the probable inability of the claimants to repay the judgment sum constituted special circumstances. The evidence showed that the claimants were unlikely to repay the whole sum, while the underlying dispute was genuine and substantial. The stay was therefore limited to £60,000.
7. The defendant was required to pay the balance within a time to be fixed. The claimants were declared entitled to indemnity from the defendant for any adjudicator’s fees they paid, up to £25,623.15. The claimants recovered 40 per cent of an assessed costs figure of £20,000.